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Reata (RETA) Beats on Q4 Earnings, Submits Bardoxolone NDA

Reata Pharmaceuticals Inc. RETA reported fourth-quarter 2020 loss of $1.90 per share, narrower than the Zacks Consensus Estimate of loss of $2.14. as well as the year-ago loss of $5.91. The significantly narrower loss was due to recognition of one-time payment for license re-acquisition in the year-ago period, which was not present in the reported quarter.

However, the above loss included stock-based compensation and certain one-time items. Adjusted loss for the quarter was $1.25 per share, wider than $1.59 per share recorded in the year-ago period.

Total revenues, comprising collaboration revenues, were $3.2 million compared with $2.7 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1.43 million.

Operating Expenses & Cash Position

Adjusted research and development expenses decreased 11% year over year to $32.7 million mainly due to higher late-stage clinical activities.

Adjusted general and administrative expenses were $12.3 million, down 8.7% from the year-ago period.

The company had cash and cash equivalents of $818.2 million as of Dec 31, 2020 compared with $610.4 million as of September end.

Full-Year Results

Reata reported revenues of $9 million compared with $26.5 million in the year-ago period. The company incurred a loss of $7.35 per share compared to loss of $9.54 per share in the year-ago period.

Pipeline Update

Reata is developing its lead pipeline candidates — bardoxolone methyl (bardoxolone) and omaveloxolone — for rare forms of chronic kidney disease (“CKD”) and neurological diseases, respectively. Please note that Reata re-acquired development, manufacturing and commercialization rights related to omaveloxolone and bardoxolone from AbbVie ABBV last year.

In a separate press release, the company announced that it has filed a new drug application (“NDA”) seeking approval for bardoxolone as a potential treatment for patients with chronic kidney disease (“CKD”) caused by Alport syndrome. The NDA was filed based on positive data from the phase III CARDINAL study. The company has requested Priority Review for the NDA to the FDA.

Shares of Reata were up 3.6% on Mar 1 following the earnings release, presumably on NDA filling news. However, the company’s shares have declined 39% in the past year against the industry’s rise of 8.3%.

Meanwhile, Reata is developing bardoxolone for treating autosomal dominant polycystic kidney disease (“ADPKD”) in the phase III FALCON study. The company is planning to increase the enrollment target for the study from 300 to 550 and expects to complete enrollment by the end of this year. Moreover, a phase II study is evaluating the candidate in patients at risk of rapidly progressing CKD due to multiple etiologies. Top-line data from this mid-stage study is expected in the second half of 2021.

In November 2020, the FDA proposed additional exploratory analyses for omaveloxolone as a potential treatment of Friedreich’s ataxia (“FA”), following completion of its internal review of a baseline-controlled study. The company completed the pivotal, two-part phase II study — MOXIe — in 2019. The baseline-controlled study was agreed upon by the FDA and the company, during the first meeting to discuss MOXIe data, for additional data to support an NDA for omaveloxolone.

On the fourth-quarter earnings call, the company stated that it has completed the additional exploratory analyses and requested a Type C meeting with the FDA to discuss the results of the analysis and path forward for the FA development program. The company may start a second pivotal study on omaveloxolone in the FA indication in the second half of 2021, following discussions with regulatory agencies in the United States and Europe.

Reata Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Reata Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Reata Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Reata currently carries a Zacks Rank #4 (Sell).

A couple of better-ranked stocks from the biotech/drug sector include Lexicon Pharmaceuticals, Inc. LXRX and Repligen Corporation RGEN, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lexicon’s loss per share estimates have narrowed from 66 cents to 17 cents for 2021 in the past 60 days. The company delivered an earnings surprise of 21.72%, on average, in the last four quarters. The stock has risen 154.1% in the past year.

Repligen earnings per share estimates have moved north from $2.03 to $2.19 for 2021 in the past 60 days. The company delivered an earnings surprise of 51.51%, on average, in the last four quarters. The stock has risen 140.1% in the past year.

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